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We feel now is a pretty good time to analyse Botanix Pharmaceuticals Limited's (ASX:BOT) business as it appears the company may be on the cusp of a considerable accomplishment. Botanix Pharmaceuticals Limited engages in the research and development of dermatology and antimicrobial products in Australia and the United States. The AU$689m market-cap company announced a latest loss of AU$14m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is Botanix Pharmaceuticals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Botanix Pharmaceuticals
According to some industry analysts covering Botanix Pharmaceuticals, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$3.7m in 2025. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 99%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Botanix Pharmaceuticals' growth isn’t the focus of this broad overview, though, bear in mind that typically pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. Botanix Pharmaceuticals currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Botanix Pharmaceuticals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Botanix Pharmaceuticals, take a look at Botanix Pharmaceuticals' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
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Valuation: What is Botanix Pharmaceuticals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Botanix Pharmaceuticals is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Botanix Pharmaceuticals’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.